1. China to Retaliate Against U.S. 10% Tariffs
2. Ontario to Remove U.S. Alcohol From Shelves
3. Dubai Builds Ultra-Luxury Homes to Attract Billionaires
4. Porsche Fires Two Top Executives After China Sales Slump
5. Global Capital Flows Into Safe-Haven Assets
6. OpenAI’s New Model Aims to Replace Research Analysts
7. Hong Kong Stocks Fall After Lunar New Year Break
1. China to Retaliate Against U.S. 10% Tariffs
On Saturday, Trump followed through on his campaign pledge, imposing a 10% blanket tariff on Chinese imports and 25% tariffs on goods from Canada and Mexico.
Just hours after the tariffs took effect, Canadian Prime Minister Justin Trudeau announced countermeasures, imposing a 25% tariff on $107 billion worth of U.S. goods.
China’s Ministry of Commerce expressed strong dissatisfaction with Trump’s tariff policy and vowed to retaliate, though specific details have not yet been disclosed.
Potential Chinese countermeasures include restricting exports of critical minerals or limiting market access for U.S. companies.
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2. Ontario to Remove U.S. Alcohol From Shelves
In response to the U.S. imposing 25% tariffs, two of Canada’s largest provinces announced that, starting Tuesday, they will remove all American alcohol brands from government-operated liquor stores.
The Liquor Control Board of Ontario (LCBO), the province’s only wholesale alcohol distributor, generates approximately $678 million in annual sales from U.S. wines, beers, and spirits.
Since LCBO is Ontario’s sole wholesaler, its decision to delist U.S. alcohol means that all restaurants and liquor stores in the province will be unable to sell American brands.
Quebec is also considering a similar move, with local retailers expected to start removing U.S. alcohol brands this week.
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3. Dubai Builds Ultra-Luxury Homes to Attract Billionaires
In recent years, Dubai developers have built an array of ultra-luxury mansions to attract the world’s wealthiest individuals, with properties ranging from $60 million to $120 million.
Dubai’s real estate market has surged since 2021, and although price growth has slowed recently, developers remain optimistic. Beachfront palaces continue to emerge across the city.
Sankari Properties CEO Mark Phoenix noted that the most expensive homes on the market tend to generate the highest profit margins. When designed meticulously, developers can maximize returns.
Last year, Dubai recorded 435 home sales exceeding $10 million, surpassing New York and Hong Kong.
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4. Porsche Fires Two Top Executives After China Sales Slump
Porsche’s sales in China have been rapidly declining, prompting the company to consider dismissing CFO Lutz Meschke.
On Saturday, Porsche announced that its supervisory board had held discussions with Meschke and Sales Chief Detlev von Platen, ultimately deciding to remove them from the executive board. Both executives have been with Porsche for over 20 years.
China remains the world’s largest auto market, but luxury car sales have been struggling as local brands such as BYD continue to gain market share.
In 2023, Porsche’s global vehicle deliveries fell 3% to 310,718 units, with a steep 28% decline in China.
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5. Global Capital Flows Into Safe-Haven Assets
Following the launch of Trump’s trade war, a massive shift of global capital into safe-haven assets is underway.
The U.S. dollar surged against eight major currencies, while the Canadian dollar plummeted to its lowest level since 2003. The euro hit its lowest point since November 2022, and the Mexican peso dropped to a three-year low.
Deutsche Bank’s head of foreign exchange, George Saravelos, stated that markets will need to structurally reprice risk to reflect the impact of the escalating trade war.
The economic consequences of tariffs on Canada and Mexico could be even greater than Brexit, with both economies potentially slipping into recession within weeks.
Higher tariffs could exacerbate inflation, making it difficult for the Federal Reserve to cut interest rates, further strengthening the U.S. dollar.
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6. OpenAI’s New Model Aims to Replace Research Analysts
Sources revealed that OpenAI is preparing to launch a new AI tool designed to function as a research analyst, potentially saving users significant time.
Dubbed Deep Research, the model can answer complex scientific questions and even provide tailored recommendations for major purchases, such as cars.
OpenAI claims that Deep Research can complete in minutes what would traditionally take human analysts several hours.
Last month, OpenAI also introduced Operator, an AI assistant capable of booking flights and grocery shopping.
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7. Hong Kong Stocks Fall After Lunar New Year Break
Following the Lunar New Year holiday, Hong Kong’s Hang Seng China Enterprises Index (HSCEI) resumed trading and opened with a decline of up to 2.2%. Mainland Chinese stock markets are set to reopen on February 5.
A Global X ETF investment strategist noted that Hong Kong stocks tend to weaken after the Chinese New Year, and the market is currently digesting the impact of Trump’s trade war while awaiting China’s response.
Stock markets worldwide have also faced losses, primarily due to concerns surrounding escalating trade tensions.
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This report contains information sourced from Financial Times, Bloomberg, The Real Deal, and other financial news media.